This May Seem Strange, But I Think Car Insurance Companies Do This. Do They?

By Lucy FisherPublished: Saturday, November 7th, 2009

Many car companies receive a number of questions. Mainly regarding on how they compute their rates and what factors can contribute to their insurance coverage. This could be possible because we all know that car insurance is a topic not usually talked about in the dinner table, or anywhere for that matter. If a million dollar check were to be hidden inside a book called Car Insurance somewhere in a library, that check would stay hidden for a very long time. So to those who want quick answers, here are a few to common and bizarre theories about car insurance.

If the Auto Insurance Company discovers I’m a smoker, my car insurance rate will surely increase.

No legal auto insurance company asks if the person is a smoker in any application form or quotation. Smoking is firmly upon the discretion of the person and it is against his or her right to be hindered of privileges based solely upon his smoking habits. This myth can possibly attribute to the thought that smoking while driving can increase your chance of collision. Depending on the situation you will most likely increase your rate because of negligence rather than because of your cigarette.

Insurance rates are based on the vicinity so all of us in this area have similar rates.

Car insurance rates are determined through a system that is given out by the state. They take into account many individual factors such as your driving record, your age, and vehicle to compute for your insurance rate. Each person’s insurance rate is calculated individually and thus makes all of our insurance rates unique in a sense.

My car insurance rates will go down when I turn 25

This Myth has some truth in it if we base this idea solely on statistical data. According to statistical data, younger and older drivers rank the highest in car crashes. So at the age of 25, you would be off that list and would therefore have a lower insurance rate. This theory is based purely on the statistics of one factor and does not consider other factors affecting the rate such as your vehicle, driving record etc. If all these other variables remain constant then it is possible to say that your insurance rate will go down. But to simply rely on your age to determine your rate is not advisable. Remember that in statistics one should always take account for variable change.